Professor Elam

Tuesday Sept  22 2020

One of my 12 steps in Conquer Accounting is to adopt a pattern of reading investment websites as well as the WSJ every day.

Today's Tuesday issue is a great example.   Let's get started

On the back page fellow socionomist Peter Atwater is quoted commenting on the GM Nikola deal

at extremes in sentiment even th4 adults in the room capitulate and want to join the kids.  Nikola was recently valued at more than  Ford. As Peter notes this is typical top of the market behavior. The article cites Enron, Worldcom, Madoff and the disastrous  Time AOL deal, later the largest write off in history to that time.

A front page article has short seller Hindenburg accusing Nikola of making exaggerated claims about its technology.  The CEO has resigned.  Nikola has lost a third of its value since the report came out and dropped  19% Monday

Even Jeff Katzenberg is having trouble signing clients for Quibi, yet another streaming service in a crowded field.

My investment weblog https://professorelam.typepad.com/markets/

spent the summer warning of decreasing breadth in the stock markets  Today is the autumn equinox, often a time of shift in markets.

The DJIA was down over  900 points intra day Monday.  Gold dropped  $51 by day end. Silver  dropped  10% on the day. Crude oil dropped 4.3%. Energy and Energy Service shares were hammered.

A judge in Michigan rules that ballots postmarked Nov 2 can be counted up to  14 days later. So expect Michigan to not report election night. See the mess coming with mail in ballots?

Daniel Planko claims the free market can deliver free college. He compares Higher Ed to the brokerage business in  1999 when a trade cost $200. .Today trades are near free.    Brokerages found other ways to make money. But it is hard to see how the existing college system can do that, certainly not with the high fixed cost it carries today. I have warned Higher Ed could go the way of the whaling industry from  1848-1858.

Another article w Your Company Health  Plan Isn't Safe in a Biden Presidency, Kamala wants 100% govt take over, yikes.

Cruise Lines want to sail again but the CDC says the crowded conditions are a hotbed for transmission.  Carnival wants to sell 18 ships, to who I wonder?

An interview with hoteliers in the SA paper Sunday suggests to me we are not grasping  all the economic effects of this pandemic. Hotel occupancy is about  30%, 60% is break even.   Property taxes are still at  100%, no discount for low occupancy.  And airlines, hotels and restaurants are all linked.  Throw in cruise lines and those are whole industries on the verge of BK.

Harley Davidson gets a new female CEO from the Food Industry.  She will have a steep learning curve to the powersports industry.  I would guess HD has topped out in terms of market share.

check out Deflation.com.

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